This application relates to data processing methods and apparatus for managing vehicle (e.g., automobile) financing.
Generally, vehicles such as automobiles have been financed through a personal loan system, whereby the purchaser makes a down payment, takes title to the automobile and pays the loan balance in monthly payments which amortize the full amount of the loan.
More recently, leasing arrangements have been introduced whereby the lessee makes monthly rental payments, returning the car to the lessor at the end of a predetermined term specified in the lease. No down payment is required, but title to the automobile remains in the lessor. It is sometimes specified in the lease that the lessee may at his option purchase the car for a stated value when the lease expires. The conditions of the lease may also include a charge for abnormal mileage or wear and tear on the automobile.
Also well known are systems for financing vehicles (especially automobiles) wherein the loan is secured by a chattel mortgage on the car, monthly payments are relatively low, but at the end of a specified term the entire balance of the loan comes due in one, relatively large "balloon" payment. If the purchaser does not have the financial resources to make this final payment, the purchaser must either refinance, default on the loan and face repossession of the automobile, or sell the car on the open market for whatever price he or she can get, which may not be high enough to meet the final payment.
It would be highly desirable to provide a system for financing vehicle purchases requiring relatively low monthly payments, where the purchaser takes title to the vehicle (unlike in a leasing transaction) and which ensures the borrower that at the end of the loan term, the car can be sold at a guaranteed price. To facilitate such a desirable result, it is important that the lender and the purchaser/borrower be placed in a good position to assess the relative risks, costs and benefits of the vehicle purchase and/or loan in a timely fashion, that the loan application be efficiently processed, and that the loan be efficiently administered.
In view of the foregoing, it is an object of this invention to provide data processing methods and apparatus for administering vehicle financing which provides for the purchaser to take title to the vehicle and which guarantees the purchaser that at the end of the loan term the vehicle can be sold for a predetermined amount.
It is a further object of this invention to provide a computerized system for managing vehicle financing which provides for determination of the loan payment amount; evaluation of a loan applicant's credit worthiness; follow-up of delinquent accounts; renewal of loan interest terms; determination at the time the loan is made of a car price ("residual value") guaranteed at the end of the predetermined term of the loan; adjustment of the residual value to take into account kilometers driven; and closing out or refinancing of the original loan at the end of the term.
The foregoing and additional advantages of the invention will be apparent from the detailed description which follows.